MPH Mittelstaendische Pharma Holding AG M P

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1 FIRST BERLIN Equity Research MPH Mittelstaendische Pharma Holding AG M P RATING Germany / Healthcare Frankfurt Q1/16 Update PRICE TARGET 4.90 Bloomberg: 93M GR Return Potential 85.3% ISIN: DE000A0NF697 Risk Rating High ATTRACTIVE HEALTHCARE PORTFOLIO Ellis Acklin, Tel. +49 (0) BUY Preliminary Q1/16 results were driven by rises in the share prices of MPH s core holdings. As of 31 December 2015, the company reports as an investment entity according to IFRS 10 as investors can now track the publicly listed M1 Beauty. Net income for the first three months amounted to 8.7m, which spurred an increase in equity to 148m. Given the change in accounting, we have retired our DCF model and adopted a sum-of-theparts valuation method to better reflect the portfolio developments. We now see fair value at 4.90 per share (previously: 5.10) and maintain our Buy rating. Positive share price developments of holdings drive bottom line As of 31 December 2015, MPH reports as an investment entity according to IFRS 10, whereas the company previously fully consolidated the majority stakes of its primary holdings. Consequently, earnings will now be chiefly driven by the share price developments of the publicly traded core holdings. The largest items on the balance sheet will be the financial assets position, which amounted to 154m at the end of Q1/16, and shareholder equity of 148m. This compares to the balance sheet total of 159m at the end of the first quarter. The equity ratio thus totalled 92% at the end of the period. Positive share price developments of holdings drive bottom line MPH is an investment entity primarily focused on growth companies positioned in the German healthcare industry. The three key core holdings are the listed HAEMATO AG, M1 Beauty AG, and CR Capital Real Estate AG. Driven mainly by the positive share price developments of the holdings, the revaluation result totalled 11m in Q1/16. This led to net income of 8.7m for the period. Given the aforementioned change in accounting, Q1/15 figures do not provide any comparative value. We also note the company no longer generates operating revenues after the deconsolidation. Financial assets for the period climbed to 154m equal to a 2.6% increase since the end of The company exited the first quarter with cash and cash equivalents of some 2m. (p.t.o.) FINANCIAL HISTORY & PROJECTIONS¹ E 2017E 2018E 2019E Revenue ( m) Pro-forma Rev. ( m)² EBT ( m) EBT margin 4.2% 33.2% 602.2% 826.3% 955.4% 955.4% Net income ( m) EPS (diluted) ( ) DPS ( ) FCF ( m) Net gearing 29.1% 6.8% 3.6% 0.7% -1.1% -2.4% Liquid assets ( m) ¹ Please note the company changed to IFRS 10 reporting as of 31 December 2015 and deconsolidated its core holdings. ² We provide pro-forma revenue of M1 Beauty, HAEMATO and CR Capital as a reference. RISKS Regulatory changes in healthcare systems, spending cuts in healthcare systems, homogenization of pharmaceutical prices within the European Union. COMPANY PROFILE MPH is a German based healthcare company specializing in the fields of pharmaceuticals, patient care, and cosmetic surgeries with a strategic focus on therapeutic areas of chronic diseases and lifestyle beautification. Rising healthcare costs in Germany are expected to continue driving demand for the inexpensive solutions provided by the company s core healthcare activities. MARKET DATA As of 15 Jun 2016 Closing Price 2.64 Shares outstanding 42.80m Market Capitalisation m 52-week Range 1.97 / 2.69 Avg. Volume (12 Months) 23,467 Multiples¹ E 2017E P/E EV/Sales EV/EBT Div. Yield 4.5% 4.5% 4.5% ¹ 2016 & 2017 reflect the change to IFRS 10 accounting STOCK OVERVIEW Jun 15 Aug 15 Oct 15 Dec 15 Feb 16 Apr 16 Jun 16 MPH Mittelstaendische Pharma Holding AG General All Share Index COMPANY DATA As of 31 Dec 2015 Liquid Assets 0.53m Current Assets 0.68m Financial Assets m Total Assets m Current Liabilities 0.97m Shareholders Equity m SHAREHOLDERS Magnum 63.5% Free Float 36.5% Analyst: Ellis Acklin, Tel. +49 (0)

2 KEY PORTFOLIO HOLDINGS The focus of MPH is to take majority stakes in companies well positioned in growing segments of the German healthcare industry and create value for investors with these holdings. With public medical costs strongly on the rise, HAEMATO is well positioned with its parallel import business, which is strongly supported by the German regulator. Lifestyle beautification treatment is also a fast growing segment. In 2014, some 0.5m aesthetic medical treatments were performed in Germany with over 50% being cosmetic surgeries according to data from Deutsche Gesellschaft für Ästhetisch-Plastische Chirurgie. Figure 1: Company structure Source: First Berlin Equity Research, MPH HAEMATO AG: Combating rising healthcare costs HAEMATO is a pharmaceutical company focused on the sale of generics and parallel imports. The company sells patented and patent free medical products to pharmacies, doctors, and hospitals with the goal of reducing healthcare costs. HAEMATO focuses chiefly on high priced pharmaceuticals for the treatment of cancer, HIV, rheumatism, and other chronic diseases. The product portfolio also now includes botulinum toxin and hyaluronic acid used for lifestyle aesthetic treatments. The company is headquartered in Schönefeld, located outside of Berlin, and employs a staff of 170. HAEMATO generated revenues of 230m in 2015 with net income of 5.5m and realised a strong uptick in Q1/16 sales with revenues growing some 50% Y/Y to 68m. The company paid a 0.30 dividend for HAEMATO is listed on the Open Market segment of the Frankfurt Stock Exchange, and MPH holds a 50% stake in the company. Table 1: HAEMATO KPIs All figures in EUR '000 FY 2013 FY 2014 FY 2015 Revenue 173, , ,727 Y/Y % 13.3% Gross Profit 11,721 16,298 15,273 Margin (%) 6.8% 8.0% 6.6% EBIT 9,934 8,233 8,225 Margin (%) 5.7% 4.1% 3.6% Cash 3,316 2,424 2,449 Net Debt 13,737 23,346 28,586 Source: First Berlin Equity Research, Company Page 2/13

3 M1 Beauty AG: Medical care for a better life M1 Beauty ranks among the top healthcare providers in Germany. The company specialises in lifestyle beauty treatments that include a wide range of cosmetic and reconstructive surgical procedures and aesthetic medicine. The strategy is to offer affordable procedures and services that are normally reserved for the affluent. The company also offers a line of Made in Germany drugs and medical devices for cosmetic treatments. Figure 2: Most common aesthetic surgical procedures in Germany in 2015 Breast reduction Intimate correction Nose correction Lip Correction Breast lift Tummy tuck Neck, forhead, face lift 3.9m 4.1m 4.3m 4.4m 4.9m 5.4m 6.4m Liposuction 10.4m Upper eyelid lift 13.3m Breast augmentation 17.8m Source: First Berlin Equity Research; Deutsche Gesellschaft für Ästhetisch-Plastische Chirurgie M1 is headquartered in Berlin, Germany and employed a staff of 27 in The company generated revenues of 35m in 2015 (2014: 23m) corresponding to 52% Y/Y growth. NI reached 6.6m last year compared to 4.6m in the prior year. Management have also proposed a 0.30 dividend for M1 is listed in the Entry Standard segment of the Frankfurt Stock Exchange, and MPH holds an 86% stake in the company. Table 2: M1 Beauty KPIs All figures in EUR '000 FY 2013 FY 2014 FY 2015 Revenue 6,081 23,017 34,926 Y/Y % 51.7% Gross Profit 1,039 6,845 10,782 Margin (%) 17.1% 29.7% 30.9% EBIT 8 5,016 7,015 Margin (%) 0.1% 21.8% 20.1% Cash 609 2, Net Debt Source: First Berlin Equity Research, Company CR Capital Real Estate AG: CR Capital is a Berlin based real estate project developer. Having previously been focused on a vibrant Berlin market, the company acquired an attractive project pipeline in Leipzig in Leipzig is regarded by many real estate participants as an up and coming marketplace in Germany, due to population growth that outpaces Berlin and falling vacancy rates. These factors are driving strong demand for new residential units. The project gives CR Capital access to some 60,000m² of sellable space and provides much improved visibility beyond Moreover, the company now aims to exploit opportunities with medical clinics and the pharmaceutical industry and already enjoys synergies with HAEMATO and M1. CR Capital generated revenues of 9.0m (2014: 18.4m), driven mainly by the handover of apartment units from the Hohenzollerndamm project. The company is listed in the Entry Standard segment of the Frankfurt Stock Exchange, and MPH holds a 54% stake. Page 3/13

4 Table 3: CR Capital KPIs All figures in EUR '000 FY 2013 FY 2014 FY 2015 Revenue 13,506 18,337 8,970 Y/Y % -51.1% Gross Profit 1,130 10,220 5,231 Margin (%) 8.4% 55.7% 58.3% EBIT ,287 2,717 Margin (%) -4.7% 39.7% 30.3% Cash 417 2,965 1,947 Net Debt 4, Source: First Berlin Equity Research, Company Page 4/13

5 REVISED PROJECTIONS IN LINE WITH NEW IFRS 10 REPORTING Table 4: Estimate revisions All figures in '000 old new % delta old new % delta Revenue 270,140 7, % 299,860 8, % EBT 10,720 31, % 12,750 38, % Margin (%) 4.0% 436.2% - 4.3% 478.3% - Net income 9,120 30, % 10,620 37, % EPS ( ) % % Source: First Berlin Equity Research 2016E 2017E With the deconsolidation of its majority stakes, MPH will no longer generate operating results. Revenues will be limited to the sale of shares. Net income will be driven primarily by the share price development of the three listed participations. MPH will receive dividends from both HAEMATO and M1 Beauty, which we have accounted for in other financial result. We expect HAEMATO to continue to distribute 0.30/share going forward whereas M1 plans to pay out 0.30/share as well. This should lead to dividend income of some 7.0m per annum over the mid-term. Revaluation results will generate further non-cash hidden reserves for MPH and are also accounted for in the financial result. We have presently modelled value accretion of some 30m 32m per annum over the mid-term. The balance will also be stripped down with long term financial assets and shareholders equity being the dominant line items. Table 5: Key changes to balance sheet All figures in EUR '000 FY 2015 FY 2014 % delta Cash , % Long-term investments 150,360 12, % Financial debt (short- and long-term) 10,049 32, % Equity 139,020 68, % Total assets 151, , % Equity ratio 92.0% 45.8% - Source: First Berlin Equity Research, Company Page 5/13

6 SUM-OF-THE-PARTS VALUATION We now use to a sum-of-the-parts valuation methodology. Following the flotation of M1 Beauty AG in 2015, investors can now track the performance of all three core holdings via their respective stock quotes. Given the change in accounting to IFRS 10 and the deconsolidation of the core holdings, MPH will no longer generate revenues from operations making our prior DCF methodology unsuitable. Value is driven by the projected fair value of HAEMATO; M1 Beauty, and CR Capital, which we have valued separately on a DCF basis. Based on the current stakes, we derive a fair value of 209m for the listed holdings. We add the book value of the non-listed holdings to this figure and subtract the Q1/16 net debt. Given the 42.8m shares outstanding (SO), we now see fair value for MPH at 4.90 per share (previously: 5.10) corresponding to a Buy rating. in '000 Shareholdings SO MPH stake Share price Fair value¹ Projected value HAEMATO AG 10,418 20,780 50% ,550 M1 Beauty AG 12,807 15,000 85% ,263 CR Capital Real Estate AG 10,848 18,780 58% ,374 Projected value of listed hldings 209,187 Fair value of listed portfolio 209,187 Non-listed investment (book value) 7,600 Nebt debt (31 December 2015) 8,200 Total fair value 208,587 MPH SO 42,800 Fair value per share ( ) 4.87 ¹ First Berlin Equity Research currently covers HAEMATO AG (Buy / PT EUR6.10) and CR Capital (Buy / PT: EUR2.80) HAEMATO VALUATION¹ All figures in EUR ' E 2017E 2018E 2019E 2020E 2021E 2022E 2023E Sales 248, , , , , , , ,220 NOPLAT 6,321 7,306 8,478 9,630 10,983 12,204 13,435 14,657 + depreciation & amortisation 1,608 1,281 1, Net operating cash flow 7,928 8,587 9,550 10,559 11,823 12,989 14,189 15,392 - total investments (CAPEX and WC) 4,310-4,466-4,902-2,991-4,771 1,146-3,218 1,782 Capital expenditures Working capital 4,806-3,930-4,325-2,444-4,195 1,749-2,594 2,422 Free cash flows (FCF) 12,238 4,122 4,648 7,568 7,052 14,135 10,971 17,174 PV of FCF's 11,599 3,547 3,632 5,370 4,543 8,269 5,827 8,283 All figures in thousands PV of FCFs in explicit period 94,217 PV of FCFs in terminal period 58,605 Enterprise value (EV) 152,823 + Net cash / - net debt -26,167 + Investments / minority interests 0 Shareholder value 126,656 Fair value per share ( ) 6.10 Terminal growth rate 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% Cost of equity 15.0% 7.1% Pre-tax cost of debt 5.5% 8.1% Tax rate 24.0% 9.1% After-tax cost of debt 10.0% 10.1% Share of equity capital 55.0% 11.1% Share of debt capital 45.0% 12.1% WACC 10.1% 13.1% *Please note our model runs through 2028 and we have only shown the abbreviated version for formatting purposes ¹ First Berlin currently rates HAEMATO AG with Buy and price target of 6.10 WACC Page 6/13

7 M1 BEAUTY VALUATION All figures in EUR ' E 2017E 2018E 2019E 2020E 2021E 2022E 2023E Net sales 40,165 45,788 51,740 57,949 64,324 70,756 77,124 84,065 NOPLAT 5,813 6,692 7,637 8,637 9,679 10,647 11,606 12,650 + depreciation & amortisation Net operating cash flow 6,013 6,921 7,896 8,927 10,001 11,001 11,991 13,070 - total investments (CAPEX and WC) 12, ,004-1,067-1,121-1,162-1,267 Capital expenditures Working capital 12, Free cash flows (FCF) 18,095 6,062 6,962 7,923 8,934 9,881 10,829 11,803 PV of FCF's 17,105 5,179 5,375 5,528 5,634 5,632 5,578 5,495 All figures in EUR '000 PV of FCFs in explicit period 88,540 PV of FCFs in terminal period 45,366 Enterprise value (EV) 133,906 + Net cash / - net debt Investments / minority interests 0 Shareholder value 134,302 Fair value per share in EUR 8.95 Terminal growth rate 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% Cost of equity 11.0% 7.6% Pre-tax cost of debt 5.5% 8.6% Tax rate 28.0% 9.6% After-tax cost of debt 4.0% 10.6% Share of equity capital 95.0% 11.6% Share of debt capital 5.0% 12.6% WACC 10.6% 13.6% *Please note our model runs through 2030 and we have only shown the abbreviated version for formatting purposes WACC CR CAPITAL REAL ESTATE VALUATION¹ All figures in EUR ' E 2017E 2018E 2019E 2020E 2021E 2022E 2023E Net sales 33,792 27,800 31,810 33,818 35,823 36,755 37,673 38,578 NOPLAT 3,953 3,530 3,951 4,164 4,381 4,465 4,548 4,628 + depreciation & amortisation Net operating cash flow 3,991 3,591 4,017 4,236 4,460 4,550 4,636 4,720 - total investments (CAPEX and WC) -8,363 2,774-3,526-1,842-1, Capital expenditures Working capital -8,278 2,844-3,447-1,757-1, Free cash flows (FCF) -4,372 6, ,395 2,609 3,606 3,699 3,789 PV of FCF's -4,192 5, ,831 1,849 2,371 2,255 2,142 All figures in thousands PV of FCFs in explicit period 21,471 PV of FCFs in terminal period 28,390 Enterprise value (EV) 49,861 + Net cash / - net debt Investments / minority interests 19 Shareholder value 48,889 Fair value per share in EUR 2.80 Terminal growth rate WACC 7.8% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% Cost of equity 15.9% 3.8% Pre-tax cost of debt 5.0% 4.8% Tax rate 30.0% 5.8% After-tax cost of debt 3.5% 6.8% Share of equity capital 35.0% 7.8% Share of debt capital 65.0% 8.8% % Fair value per share in EUR % * please note our model runs though 2028 and we have shown only the abbreviated verson for formatting purposes ¹ First Berlin Equity Research currently rates CR Capital with Buy and price target of 2.80 WACC Page 7/13

8 INCOME STATEMENT¹ All figures in EUR ' E 2017E 2018E Revenues 219, ,887 5,170 4,395 3,735 Change in inventories -27-3, Cost of goods sold -197, ,703-5,842-3,779-3,212 Gross profit 21,789 27, Personnel expenses -6,479-8, Other OpEx -8,006-10, Other income 5,442 9, Depreciation & amortisation -1,829-5, Operating income (EBIT) 10,917 13,152-1, Net financial result -1,604-2, Other financial result 0 7,860 6,968 6,968 6,968 Depreciation of financial assets 0-6,417-4, Revaluation result 0 74,707 30,287 29,765 29,104 Pre-tax income (EBT) 9,313 87,301 31,135 36,313 35,686 Income taxes , Net income / loss 8,453 84,101 30,512 35,587 34,972 Minority interests 3,503 1, Net income after minorities 4,950 82,588 30,512 35,587 34,972 EPS (in ) Ratios EBT margin on revenues 4.2% 33.2% 602.2% 826.3% 955.4% Net margin on revenues 3.9% 32.0% 590.2% 809.8% 936.2% Tax rate 9.2% 3.7% 2.0% 2.0% 2.0% Expenses as % of revenues Personnel expenses -3.0% -3.2% -8.0% -7.6% -7.4% Other OpEx -3.7% -4.1% -10.0% -9.5% -9.3% Depreciation & amortisation -0.8% -2.0% -0.1% -0.1% -0.1% Y-Y Growth Revenues 26.3% 19.9% -98.0% -15.0% -15.0% Pre-tax income -17.4% 837.4% -64.3% 16.6% -1.7% Net income/ loss -42.5% 894.9% -63.7% 16.6% -1.7% ¹ Please not the change to IFRS 10 accounting as of 31 December 2015 Page 8/13

9 BALANCESHEET¹ All figures in EUR ' E 2017E 2018E Assets Current assets, total 68, ,101 8,580 12,545 Cash and equivalents 10, ,056 8,541 12,512 ST financial assets 7, Trade receivables 11, Inventories 35, Other ST assets 3, Non-current assets, total 82, , , , ,493 Property, plant & equipment 2, Goodw ill & other intangibles 53, Investment properties 13, Financial assets 12, , , , ,449 Deferred taxes Total assets 150, , , , ,038 Shareholders' equity & debt Current liabilities, total 28, Trade payables 7, ST debt 14, Provisions 3, Other ST financial liabilities Other current liabilities 2, Long-term liabilities, total 26,826 11,117 10,016 10,012 10,009 Long-term debt 23,356 9,990 9,990 9,990 9,990 LT provisions Deferred tax liabilities 3,443 1, Shareholders' equity 68, , , , ,677 Minority interests 25, Total equity 94, , , , ,677 Total consolidated equity and debt 124, , , , ,038 Ratios Current ratio (x) Quick ratio (x) Net debt 20,017 9,522 5,934 1,449-2,522 Net gearing 29% 7% 4% 1% -1% Equity ratio 45.8% 92.0% 94.1% 95.0% 95.6% ¹ Please not the change to IFRS 10 accounting as of 31 December 2015 Page 9/13

10 CASH FLOW STATEMENT¹ All figures in EUR ' E 2017E 2018E Pre-tax income 9,308 87,279 31,135 36,313 35,686 Depreciation and amortisation 1,829 10,896 4, Revaluation gains -4,953-81,551-30,287-29,765-29,104 Changes in working capital , Other adjustments -5,055-15,342 5,842 3,779 3,212 Net financial result 1,604 2, Operating cash flow 2,724 2,749 9,654 10,653 10,126 Interest income Interest expense paid -1,779-2, Tax paid -1, Net operating cash flow ,732 9,627 9,112 CapEx -9,913-26, Proceeds from disposal of fixed assets 13,387 18, Cash flow from investing 3,474-8, Free cash flow (FCF) 2,983-7,848 8,726 9,623 9,108 Equity inflow, net 2,485 3, Debt inflow, net 5,880 6, Dividend paid to shareholders -7,086-8,223-5,138-5,138-5,138 Cash flow from financing 1,279 2,170-5,198-5,138-5,138 Net cash flows 4,262-9,590 3,528 4,485 3,971 Cash, start of the year 5,855 10, ,056 8,541 Cash, end of the year 10, ,056 8,541 12,512 EBITDA/share (in ) Y-Y Growth Operating cash flow n.m. n.m % 10.3% -5.4% Free cash flow n.m. n.m. n.m. 10.3% -5.3% EBITDA/share -50.4% 88.7% -89.0% n.m. n.m. ¹ Please not the change to IFRS 10 accounting as of 31 December 2015 Page 10/13

11 FIRST BERLIN Equity Research FIRST BERLIN RECOMMENDATION & PRICE TARGET HISTORY Report No.: Initial Report Date of publication Previous day closing price Recommendation Price target 29 October Buy December Buy May Buy September Buy Today 2.64 Buy 4.90 Authored by: Ellis Acklin, Analyst Company responsible for preparation: First Berlin Equity Research GmbH Mohrenstraße Berlin Tel. +49 (0) Fax +49 (0) info@firstberlin.com Person responsible for forwarding or distributing this financial analysis: Martin Bailey Copyright 2016 First Berlin Equity Research GmbH No part of this financial analysis may be copied, photocopied, duplicated or distributed in any form or media whatsoever without prior written permission from First Berlin Equity Research GmbH. First Berlin Equity Research GmbH shall be identified as the source in the case of quotations. Further information is available on request. INFORMATION PURSUANT TO SECTION 34b OF THE GERMAN SECURITIES TRADING ACT [WPHG] AND THE GERMAN ORDINANCE ON THE ANALYSIS OF FINANCIAL INSTRUMENTS [FINANV] First Berlin Equity Research GmbH (hereinafter referred to as: First Berlin ) prepares financial analyses while taking the relevant regulatory provisions, in particular the German Securities Trading Act [WpHG] and the German Ordinance on the Analysis of Financial Instruments [FinAnV], into consideration. In the following First Berlin provides investors with information about the statutory provisions that are to be observed in the preparation of financial analyses. CONFLICTS OF INTEREST In accordance with Section 34b Paragraph 1 p. 2 No. 2 of the German Securities Trading Act [WpHG] financial analyses may only be passed on or publicly distributed if circumstances or relations which may cause conflicts of interest among the authors, the legal entities responsible for such preparation or companies associated with them are disclosed along with the financial analysis. First Berlin offers a range of services that go beyond the preparation of financial analyses. Although First Berlin strives to avoid conflicts of interest wherever possible, First Berlin may maintain the following relations with the analysed company, which in particular may constitute a potential conflict of interest (further information and data may be provided on request): The author, First Berlin, or a company associated with First Berlin holds an interest of more than five percent in the share capital of the analysed company; The author, First Berlin, or a company associated with First Berlin provided investment banking or consulting services for the analysed company within the past twelve months for which remuneration was or was to be paid; The author, First Berlin, or a company associated with First Berlin reached an agreement with the analysed company for preparation of a financial analysis for which remuneration is owed; The author, First Berlin, or a company associated with First Berlin has other significant financial interests in the analysed company; In order to avoid and, if necessary, manage possible conflicts of interest both the author of the financial analysis and First Berlin shall be obliged to neither hold nor in any way trade the securities of the company analyzed. The remuneration of the author of the financial analysis stands in no direct or indirect connection with the recommendations or opinions represented in the financial analysis. Furthermore, the remuneration of the author of the financial analysis is neither coupled directly to financial transactions nor to stock exchange trading volume or asset management fees. If despite these measures one or more of the aforementioned conflicts of interest cannot be avoided on the part of the author or First Berlin, then reference shall be made to such conflict of interest. PRICE TARGET DATES Unless otherwise indicated, current prices refer to the closing prices of the previous trading day. AGREEMENT WITH THE ANALYSED COMPANY AND MAINTENANCE OF OBJECTIVITY The present financial analysis is based on the author s own knowledge and research. The author prepared this study without any direct or indirect influence exerted on the part of the analysed company. Parts of the financial analysis were possibly provided to the analysed company prior to publication in order to avoid inaccuracies in the representation of facts. However, no substantial changes were made at the request of the analysed company following any such provision. Page 11/13

12 FIRST BERLIN Equity Research ASSET VALUATION SYSTEM First Berlin s system for asset valuation is divided into an asset recommendation and a risk assessment. ASSET RECOMMENDATION The recommendations determined in accordance with the share price trend anticipated by First Berlin in the respectively indicated investment period are as follows: STRONG BUY: An expected favourable price trend of more than 50% combined with sizeable confidence in the quality and forecast security of management. BUY: An expected favourable price trend of more than 25% percent. ADD: An expected favourable price trend of between 0% and 25%. REDUCE: An expected negative price trend of between 0% and -15%. SELL: An expected negative price trend of more than -15%. RISK ASSESSMENT The First Berlin categories for risk assessment are low, average, high and speculative. 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13 FIRST BERLIN Equity Research NO ESTABLISHMENT OF CONTRACTUAL OBLIGATIONS By taking note of this financial analysis the recipient neither becomes a customer of First Berlin, nor does First Berlin incur any contractual, quasi-contractual or pre-contractual obligations and/or responsibilities toward the recipient. In particular no information contract shall be established between First Berlin and the recipient of this information. NO OBLIGATION TO UPDATE First Berlin, the author and/or the person responsible for passing on or distributing the financial analysis shall not be obliged to update the financial analysis. Investors must keep themselves informed about the current course of business and any changes in the current course of business of the analysed company. DUPLICATION Dispatch or duplication of this document is not permitted without the prior written consent of First Berlin. SEVERABILITY Should any provision of this disclaimer prove to be illegal, invalid or unenforceable under the respectively applicable law, then such provision shall be treated as if it were not an integral component of this disclaimer; in no way shall it affect the legality, validity or enforceability of the remaining provisions. APPLICABLE LAW, PLACE OF JURISDICTION The preparation of this financial analysis shall be subject to the law obtaining in the Federal Republic of Germany. The place of jurisdiction for any disputes shall be Berlin (Germany). NOTICE OF DISCLAIMER By taking note of this financial analysis the recipient confirms the binding nature of the above explanations. By using this document or relying on it in any manner whatsoever the recipient accepts the above restrictions as binding for the recipient. QUALIFIED INSTITUTIONAL INVESTORS First Berlin financial analyses are intended exclusively for qualified institutional investors. This report is not intended for distribution in the USA, Canada and/or the United Kingdom (Great Britain). Page 13/13